Question 1

What is ACA?

Accepted Answer

ACA is the native governance and utility token of the Acala network, and it is also the chain's transaction fee token. Users use it to pay fees for on-chain transactions or contract interactions; holders can participate in decisions about network parameters and development direction through governance. It is not equity in Acala as a company. Therefore, ACA's functions arise from network rules: fee demand comes from transactions and applications using Acala, while governance rights come from token holdings; neither is equivalent to fixed income or a claim on company profits.

Question 2

Why might ACA be needed when using Acala?

Accepted Answer

When sending a transaction or calling a smart contract on Acala, ACA can be used as the fee payment asset. Transactions may require ACA because the network needs fees to allocate resources for transaction processing; without sufficient available ACA, the relevant operation may not be completed through that fee path. Fees are not simply transferred to a holder: the official current token description includes part of accumulated network fees in the burn rules. Governance can adjust those rules, so actual fee and burn arrangements should be based on the on-chain governance rules in effect at that time.

Question 3

What role does ACA play in governance?

Accepted Answer

ACA holders can participate in Acala governance to influence network parameters and token-related arrangements. Governance's practical role is to incorporate holders' votes into protocol decisions, rather than granting them operational control over a company. This also means governance can change certain economic rules, such as emission or burn parameters; holding ACA does not guarantee that a proposal will pass or that a voting outcome will produce a particular financial result.

Question 4

How are ACA's supply cap and annual issuance arranged?

Accepted Answer

ACA has a maximum total supply of 1.6 billion tokens. Official information states that the network may issue up to 100 million tokens per year for up to 6 years; this describes an annual emission arrangement under the cap, rather than a commitment that the full amount will necessarily enter circulation every year. Of that annual issuance, half is allocated to ACA staking incentives, while the other half is used for yield farming in liquidity pools, supporting UAH, Euphrates, DApps, and other uses that promote liquidity and adoption. Issuance, allocation, and actual tradable supply are not the same concept: even if tokens are issued, they may remain in reward, pool, or other allocation paths.

Question 5

How does ACA's burn mechanism work?

Accepted Answer

ACA's supply rules also include burning: official information states that 1% of unused emissions is burned each month, along with 20% of accumulated network fees. These two percentages apply to different bases—the former to unused issuance capacity and the latter to accumulated network fees. Burning reduces the relevant amount of tokens or unused emissions, but cannot by itself support a price conclusion; issuance, actual use, market trading, and governance adjustments all affect the final outcome. The above burn parameters can be adjusted through governance.

Question 6

How is ACA used in the Acala EVM environment?

Accepted Answer

Yes. Acala synchronizes the same ACA balance across three forms: the Acala native token, the EVM native token, and the predeployed ACA ERC-20 token. Users can therefore transfer ACA as a native asset or call or transfer it as an ERC-20 token in the EVM environment. Here, “synchronization” means that a balance change in any of the forms above is reflected in the other two forms; it does not mean that three independent copies of ACA are issued. This design allows EVM applications to use ACA while avoiding treating the ERC-20 mapped asset as another separate token.

Question 7

Why might different account interfaces show different ACA balances?

Accepted Answer

The three synchronized forms of ACA do not guarantee that available balances shown in all interfaces are exactly the same. Official information specifically notes that the balance of an EVM account bound to a Polkadot.js account may differ because of staking and other reasons. Therefore, before a transfer or contract operation, users should confirm which account and which available balance they are using. A balance difference does not mean another type of ACA has appeared; it may reflect staking or other account states in that account.

Question 8

What services does the Acala network primarily provide?

Accepted Answer

Acala is positioned as a decentralized liquidity blockchain that provides unified liquidity and built-in cross-chain capabilities. Its goal is not only to provide ACA transfers, but to enable assets from different chains to be used within the same infrastructure and applications. Products listed officially include LDOT liquid staking and the Euphrates liquidity distribution platform: the former lets users receive usable LDOT after staking DOT, while the latter serves participants seeking to support protocols or bootstrap liquidity for applications. ACA is the fee and governance-layer token of this network.

Question 9

What is the difference between LDOT and ACA?

Accepted Answer

LDOT is the liquid-staked DOT product currently launched under Acala's Homa protocol: users stake DOT and receive LDOT, which represents staked DOT and accumulated rewards. It differs from ACA, which is the network's native governance and fee token. The key to this arrangement is that users do not need to lose all usability of their assets while waiting for staking rewards; LDOT can be used in liquidity pools or as DeFi collateral. Whether to use these subsequent scenarios still depends on the rules and risks of the relevant protocols.

Question 10

How does Acala process transactions and obtain network security?

Accepted Answer

Acala is a Polkadot parachain: user transactions are first collected by collators, which use them to produce candidate blocks and state transition proofs; Polkadot validators then validate and finalize them based on those proofs. Thus, collators are responsible for maintaining parachain transaction processing and candidate block production, while Acala's security and finality depend on Polkadot relay chain mechanisms. Cross-chain capability is implemented through trustless message passing with Polkadot and connected parachains.

Question 11

What is the relationship between LCDOT and ACA?

Accepted Answer

LCDOT is a token that historically represented DOT locked during Acala's crowdloan; it is not ACA. Its function was to provide holders with a liquid representation while DOT was locked because of the crowdloan. Official information states that LCDOT holders could later automatically receive a DOT airdrop or redeem it back for DOT at 1:1 through a designated portal. This arrangement describes the historical redemption relationship of a specific crowdloan asset and must not be applied to ACA or general DOT staking.

Question 12

What is the relationship among ACA issuance, use, and burning?

Accepted Answer

Acala's economic mechanism connects ACA staking incentives, liquidity incentives, network fees, and burns: half of annual emissions is used for staking and the other half for liquidity and application incentives; part of fees generated by network use is burned under the rules. This shows that the protocol seeks to incentivize participation and liquidity separately while using burns to handle some unused emissions and fees; however, it cannot prove that ACA demand, circulating supply, or price will move in a particular direction. Actual effects depend on governance execution, application usage, and market conditions.

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